Schwarzenegger says he wants stronger budget reforms. Specifically he wants tighter controls on when and how much money can be shifted from a so-called “rainy day fund” that’s included in the measure. The Governor says he won’t sign what he calls a “get out of town budget”.

“The way this budget is right now we will need a huge tax increase next year or to cut education severely. That is why I say we should fix the budget this year and realize there’s a structural problem…”

Senate Democratic Leader Don Perata says the Governor got most of what he wanted. Perata says he’s ready to override a veto.

“The fact of the matter is it’s the best the legislature could do with his inability to get any votes.

Republican votes are needed to pass a state budget—Democrats dropped tax increases to get them. Republican votes would also be needed for a veto override. Schwarzenegger says if they do override his veto—he in turn will veto hundreds of bills on his desk.